CMS European PE Study 2026

CMS announces the publication of the fifth edition of the CMS European Private Equity Study 2026, providing a detailed analysis of private equity (PE) transactions that CMS advised on throughout 2025.

The study examines data from over 170 PE deals across Europe, comparing key contractual terms from recent transactions with hundreds of deals reviewed in previous years. It also highlights differences between private equity M&A deals and strategic M&A deals.

Key findings: The highs, lows and emerging trends

• Private equity activity remains stable: Deal activity in 2025 remained stable compared to 2024, with sponsors continuing to focus on capital deployment. New investments accounted for 72% of transactions, while exit activity declined.
• Shift towards buyer-friendly terms: Deal dynamics continued to favour buyers, with purchase price adjustments increasing to 45%, more frequent use of MAC clauses and reduced reliance on auctions.
• Sector activity rebalances: Technology, Media & Communications remained the most active sector at 22%, while Real Estate and Industrial activity increased significantly. Energy & Climate Change deal activity declined.
• Structured pricing remains common: Earn-outs and other pricing mechanisms remained widely used, reflecting continued valuation gaps and cautious dealmaking.

Looking ahead: Outlook for 2026

Private equity investors should expect a disciplined and selective market in 2026. Continued valuation gaps, geopolitical uncertainty and constrained financing conditions mean transactions will require clearer pricing conviction, more structured terms and stronger value-creation plans.

Sponsors across Europe are likely to prioritise buyout and add-on opportunities where they can drive operational improvement. Stabilising debt markets, sustained levels of dry powder and digital transformation through the growing use of AI are expected to support gradual deal activity.

For businesses, this translates into a more selective investment environment, where well-positioned, high-quality assets with a clear growth and value creation story are more likely to attract capital.

Jacob Siebert, CMS Partner and Co-Head of the international CMS Private Equity Group, comments: “The European private equity market showed strong resilience in 2025: despite ongoing macroeconomic uncertainty and constrained exit routes, deal activity remained stable, with sponsors continuing to focus on capital deployment and new investments. At the same time, we are seeing a clear evolution in market practice, with greater emphasis on disciplined execution, value creation within existing portfolios and increasingly structured – and at times more buyer-friendly – transaction terms.”

Narinder Jugpal, CMS Partner and Co-Head of the international CMS Private Equity Group, comments: “European private equity enters 2026 with significant capital to deploy, but the market is unlikely to reward volume for its own sake. Sponsors will need to remain disciplined and selective, using the full execution toolkit while focusing on assets with resilient fundamentals and demonstrable growth potential. As AI and digital transformation increasingly shape investment theses, sponsors that can demonstrate clear conviction on execution and operational improvement will be best placed to unlock value and compete for high-quality opportunities.”

Read the full CMS European PE Study 2026 here: CMS European Private Equity Study 2026